I have read a few stories like this over the last month:

www.news.com.au/finance/real-estate/buying/how-sydney-family-has-17m-property-portfolio-spanning-across-three-states/news-story/9e633ee23003d05be85f87ca31b0def3

People that have jumped into the property market and already have huge portfolios on relatively small incomes. So why is everyone seeming to whinge that properties are unaffordable for first home buyers?

If these people can get $1.7m worth in just 4 years, what wrong with the rest of you losers?

It's a good scheme too as we can all do it and just keeping getting more equity and buying more houses and everyone wins!

Seriously though, this shows that its all a big Ponzi scheme and needs negative gearing to keep it running. How can you argue otherwise?

For year's investment advisers have been totally against this system, leveraging one property to buy another. It's always been the same advice, but what if the market falls? Some advisers now say it was actually a good option with history showing there has has been little pull back in house prices and it seems rents have been pushed up to ridiculous levels.


What happens in the future is anyone's guess, I'm sure the same advisors would be saying it's too risky and don't do it, but will they be proven wrong again.


Personally after owning a couple of rentals myself, never again, especially with these new tenant friendly regulations coming in. It would only take one bad tenant trashing a place for the house of cards to come tumbling down. Zero rent while you attempt to find a builder for repairs over an extended period would cripple anyone's rental portfolio.

If it is so easy then everyone would do it. Fact is that most people are not comfortable carrying that much debt or risk.

If there is a property downturn, the family in the article are farked.

There was an election fought on negative gearing and it didn't get up, so there is little chance it's going to change anytime soon.

The change in voter demographics that is getting under way now means that there will be sufficient political pressure to gradually sweep away all the negative gearing perks. I'd give it ten years at most.

No u are forgetting that the govt needs and incentivises investors because they dont build f.all social housing unlike other countries. And the reason qhy our prices keep growing is as soon as the economy looks like slowing down (which is a natural cycle and ia healthy getting rid of inefficiencies etc) the just pump prime ot with migrants.

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myusernam said..
No u are forgetting that the govt needs and incentivises investors because they dont build f.all social housing unlike other countries.

New-builds in Sydney are very rare for rental properties. Usually its people starting out in their first home. I am guessing it is the same in other capital cities and property "investors" are just buying existing houses, adding nothing to the housing stock.

I have read of serious property investors buying land and building multiple townhouses or similar, purely for the numbers, but generally not single residences. I am guessing it is because the numbers don't add up and getting finance for a build is much more onerous.

All roads in Seabreeze lead to Bitcoin..

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Shifu said..
The change in voter demographics that is getting under way now means that there will be sufficient political pressure to gradually sweep away all the negative gearing perks. I'd give it ten years at most.

But in 10 years, won't there just be a new generation of negative gearing voters?

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myscreenname said..
...There was an election fought on negative gearing and it didn't get up, so there is little chance it's going to change anytime soon.

Wasn't it fought more on capital gains discount, and even more on "the big end of town" ?

Wasn't negative gearing just thrown in as one of the many "big end of town" issues.

Maybe it would have had more success if the narrative had been linking negative gearing and housing affordability, rather than lumping everything into a general class war ?

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bjw said..
All roads in Seabreeze lead to Bitcoin..

Can't you also negatively gear bitcoin ?

If you spend more on upgrading your bitcoin mining enterprise than it makes you can offset those losses against your fat profit on rental incomes.

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Carantoc said..

Wasn't it fought more on capital gains discount, and even more on "the big end of town" ?

Wasn't negative gearing just thrown in as one of the many "big end of town" issues.

Maybe it would have had more success if the narrative had been linking negative gearing and housing affordability, rather than lumping everything into a general class war ?

I can't remember. You are probably right. Because it failed its unlikely to be an issue for a decade or more. It's all about important stuff now, like the Voice and celebrating all the beautiful rainbow people.

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myscreenname said..

Carantoc said..

Wasn't it fought more on capital gains discount, and even more on "the big end of town" ?

Wasn't negative gearing just thrown in as one of the many "big end of town" issues.

Maybe it would have had more success if the narrative had been linking negative gearing and housing affordability, rather than lumping everything into a general class war ?

I can't remember. You are probably right. Because it failed its unlikely to be an issue for a decade or more. It's all about important stuff now, like the Voice and celebrating all the beautiful rainbow people.

By the time the people worried about trivial stuff now get to middle age, they will have run out of people to blame for not implementing change. I can't blame them though as its hard to create significant mass to make a political party listen.

On top of that half of them think that they need to outcompete the rest to get on the ladder to succeed. Like most of us they see the paper profits and forget or don't realise it is a broken setup.

When people think that its right to use the bank of mum and dad to buy an overpriced property, and others that can't do that lose out, something is wrong.

I wonder if this recent remote working thing has prompted people to move to more affordable places/cities? I guess some companies are winding that back, but it would be pretty sweet to work 100% remote 'in Sydney' but actually be living somewhere much cheaper with a better quality of life.

I just read on 'news':

Finance Brokers Association of Australia managing director Peter White said many mortgage holders were now finding it difficult to refinance their loans.

"The RBA must take responsibility for their poor insight and management that has led to the current issues facing those across Australia who are paying off a home loan and renting," he said.

Seriously? The RBA is there to take control if things are getting out of control with the economy. Bad management by successive governments does not take away the RBAs requirement to step in when things get overheated or slow down too much.

Finance brokers? The drug dealers of the real estate industry....

RBA's main task is the health and value of the currency. Everything else is second.

Makes us wonder if Albos team constant spray at the RBA, would they "go turkey" and reduce rates at inflationary conditions if they controlled the RBA.

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FormulaNova said..
..I wonder if this recent remote working thing has prompted people to move to more affordable places/cities? I guess some companies are winding that back, but it would be pretty sweet to work 100% remote 'in Sydney' but actually be living somewhere much cheaper with a better quality of life.

Not so long ago on these very forums everyone told me that was why we were spending a gazillion on NBN to every property in Australia.
So we could all work from home and get medical consultations over the net.


By incredible co-incident an actual, real, opportunity to force people to work from home and get medical consultations over the net came along....and...... we found out ...... nope, neither work for most people.


Oh yeah, my non-NBN starlink is still awesome. Somewhat conflicted between the pain I feel at give Musk any money and the pleasure I feel at not having to give the NBN any money. The balance is just tipped by the fact I know all the NBN disciples have to pay that little bit more for something they don't actually want it to do what they said they wanted it to do, by me not using it at all.

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Carantoc said..
Not so long ago on these very forums everyone told me that was why we were spending a gazillion on NBN to every property in Australia.
So we could all work from home and get medical consultations over the net.


By incredible co-incident an actual, real, opportunity to force people to work from home and get medical consultations over the net came along....and...... we found out ...... nope, neither work for most people.


Oh yeah, my non-NBN starlink is still awesome. Somewhat conflicted between the pain I feel at give Musk any money and the pleasure I feel at not having to give the NBN any money. The balance is just tipped by the fact I know all the NBN disciples have to pay that little bit more for something they don't actually want it to do what they said they wanted it to do, by me not using it at all.

To be fair, the homosexual porn I'm streaming now has better quality and is less glitchy than it was back in 2016

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myscreenname said..

Carantoc said..
Not so long ago on these very forums everyone told me that was why we were spending a gazillion on NBN to every property in Australia.
So we could all work from home and get medical consultations over the net.


By incredible co-incident an actual, real, opportunity to force people to work from home and get medical consultations over the net came along....and...... we found out ...... nope, neither work for most people.


Oh yeah, my non-NBN starlink is still awesome. Somewhat conflicted between the pain I feel at give Musk any money and the pleasure I feel at not having to give the NBN any money. The balance is just tipped by the fact I know all the NBN disciples have to pay that little bit more for something they don't actually want it to do what they said they wanted it to do, by me not using it at all.

To be fair, the homosexual porn I'm streaming now has better quality and is less glitchy than it was back in 2016

Hey, must be something wrong with mine. (the connection, not the lesbian porn) I can see a post that you quoted, but it doesn't show up in my view. That'd be the NBN I think.

All hail the NBN! When a failure can be a feature.

Property investment is the way to financial freedom, in 2010. We did this buying an investment property in 2010 at a place I went windsurfing. My reasoning to look and buy in this area was it was the only place an hour and half from the Sydney CBD with water views and a railway station where a house could be bought for less than $400k.

We bought an old house with beautiful views and the potential to make it dual occupancy. We did this and rented it to two tenants. Shortly afterwards our family income halved. We were very lucky interest rates dropped over time so it was possible to service two mortgages on one modest income and the rental income.

i was sick of the hassles of the property and tried to sell it in 2020 after the Covid scare started. There was no one interested in buying it. In early 2021 a real estate agent contacted me saying the market there was hot and property was in demand. We sold the property shortly afterwards.

I was concerned at the time there was a bad combination. We had interest rates at historic lows. We had record government spending so workers could stay home. We had property prices rapidly rising. I thought this present circumstances is not sustainable.

After selling our debt was paid off and we had a far bit of money left over. More than enough money to leave work for a while.

Kudos to you. All Investments have risk. No one in Australia becomes rich from wages only, interest on deposits etc investments are the only way to have a try in something bigger.

The problem is investment opportunities are a few in between here, and risk/benefit/security is geared towards Real Estate comparing w others.

Gambling, petrol station retail, supermkt/grocery chains also seem to attract a bit more of investor attention too.

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FormulaNova said..


Seriously though, this shows that its all a big Ponzi scheme and needs negative gearing to keep it running. How can you argue otherwise?

The guys who have done well in this space have typically positively geared their acquisitions and leveraged off capital gain to buy the next one. This means they are buying cheaper houses rather than expensive. Two of the biggest benefits are that cheaper rental houses are always in demand and cheaper houses are less impacted by a slowing market.

Negative gearing is a mugs game unless you have a high income and looking for some relief from tax.

If you're prepared to spend the time researching its very doable.....!

Henry David Thoreau said, "A man is rich in proportion to the number of things he can afford to leave alone."

The truly rich man is the one who does not think about money. By this standard many billionaires are paupers. In fact, the more money a person has, the harder it is to think of anything else.

The richest man in town is the one whose needs are least.

"He who dies with the most toys wins." - Originally attributed to Malcolm Forbes.

He who regurgitates the official narrative without concrete physical evidence sells their soul the most - japie

"There are in fact two things, science and opinion; the former begets knowledge, the latter ignorance." - Hippocrates.

He whose bank balance hits zero on the day he dies has lived life to the full.

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Pcdefender said..
Henry David Thoreau said, "A man is rich in proportion to the number of things he can afford to leave alone."

Sounds like something my mom would say to 12yo me

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cisco said..
He whose bank balance hits zero on the day he dies has lived life to the full.

Enzo Ferrari had a similar philosophy.

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cisco said..
He whose bank balance hits zero on the day he dies has lived life to the full.

John Elliott was a contender by that rule.

www.theage.com.au/national/victoria/6951-in-the-bank-and-some-furniture-what-was-left-in-john-elliott-s-will-20230726-p5drh5.html

I see there was an article again on NZ's house rental prices stabilising to levels seen 7 years ago. At least in Auckland.

They have implemented planning changes where they allowed higher density almost everywhere in Auckland as well as changing the way housing profits are taxed. Who would have thought?

But it seems like they are now ramping up immigration. So just like here they will end up where "supply is not enough" because who can build enough houses to match the rate of immigration?

I see Sydney is set to become similar. The federal goverment has committed to building more housing to increase supply. What they haven't plainly stated though is that they are not building places themselves, they are heavily relaxing planning rules to allow much higher density so as to encurage developers to build all the new housing.

Welcome to 'new-aus' where you will be lucky to be in a townhouse let alone a house with a backyard.

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FormulaNova said..
I see there was an article again on NZ's house rental prices stabilising to levels seen 7 years ago. At least in Auckland.

They have implemented planning changes where they allowed higher density almost everywhere in Auckland as well as changing the way housing profits are taxed. Who would have thought?

But it seems like they are now ramping up immigration. So just like here they will end up where "supply is not enough" because who can build enough houses to match the rate of immigration?

I see Sydney is set to become similar. The federal goverment has committed to building more housing to increase supply. What they haven't plainly stated though is that they are not building places themselves, they are heavily relaxing planning rules to allow much higher density so as to encurage developers to build all the new housing.

Welcome to 'new-aus' where you will be lucky to be in a townhouse let alone a house with a backyard.

yes our political system and the 3 year election cycle ensures that no hard or necessary measures ever get implimented and the moment the econoomy looks like slowing they just open the tap of immigration (something u learn in first year economics)
adding tax paying consumers immediatley to the economy and propping up the growth figures. the problem with that is
the quality of our enviroment is inversely proportional to the number of people. they all want to live in western sydney or melbourne. And we did away with the WAP which used to filter all the duds from the shxthole countries (leader of the free world term not mine)
and half of them are terrorists or fxckers that dont assimilate and now we canthave bacon on our bunnings sausages and the economy - instead of having necessary hard times that culls the inneficient dud businesses, just continues to grow and the demand for housing continues.